Solar units power up in popularity

THE rapid growth in solar panel installations means the nation's roofs now have a generating capacity equivalent to Victoria's largest brown coal power plant.

The latest data from the Australian Clean Energy Regulator shows 858,000 homes have installed photovoltaic solar panels, with a total capacity of just under 2 gigawatts - about the same as the Loy Yang A coal plant in the Latrobe Valley.

At this rate of take-up, the millionth home will tap into solar power before the end of June next year, according to Professor Ray Wills, chief adviser to industry lobby group the Sustainable Energy Association.

The growth in demand for solar systems has largely weathered the dramatic reduction in state incentive schemes - feed-in tariffs - in 2011. The cuts prompted an initial dive in orders, but demand rebounded as electricity prices rose and the cost of panels swiftly fell.

Intense international competition among suppliers, particularly from China, meant households could expect to pay back the cost of their system in savings on their electricity bills in as little as four years, Professor Wills said.

''By 2013-14, solar panels will be so cheap that you'll coat every surface that has exposure to sunlight,'' he said. ''You might even throw a coat on your dog.''

The fastest growth in solar purchases has been in the outer suburbs of major cities.

The spread of solar panels to more than 10 per cent of Australian households is adding to challenges facing large-scale power generators such as EnergyAustralia, formerly known as TRUenergy. To the surprise of many forecasters, power demand has dropped since the end of 2010.

A high dollar has forced some manufacturers to scale back production or shift operations abroad, but the uptake of solar panels and the spread of other renewable energy sources such as wind have added to the reduction in electricity demand to about 2004 levels.